Employee recognition and rewards used to be synonymous with handing out a bonus and a plaque when you hit your 5 year tenure mark. A paycheck bump and a trophy don’t quite cut it anymore.
Effective employee rewards and recognition programs nowadays are much more multifaceted. Rather than an afterthought, employee recognition is now a core pillar for the success of any company. But how exactly should you recognize and reward your employees and how often should you do it?
There’s no one size fits all approach to recognition.
In Gallup and WorkHuman’s recent study, Unleashing the Human Element at Work: Transforming Workplaces Through Recognition, they identified Five Pillars of Recognition that are necessary for successful recognition:
✅ Embedded in Culture
As you can imagine, in order to achieve all five of these pillars, companies must deploy various types of employee recognition methods. When done successfully though, employees are 4x as likely to be engaged and 5x as likely to see themselves growing at the company.
With so many types of recognition and reward offerings and formats, it can be tough finding the perfect mix for your unique company culture and goals. Don’t worry though, we’ve done the heavy lifting for you! Keep reading to learn everything you need to know about employee recognition and rewards including the when, why, and how.
When should you use different types of employee recognition and rewards at work?
We all know why employee recognition is important but with so many ways to reward employees, it can be overwhelming identifying the best moments for employee recognition. Let’s explore some key recognition moments in the workplace that help keep your employees feeling appreciated & motivated.
💼 New Hire and Orientation
You only get one chance to make a good first impression, so don’t waste it! Kick things off on the right foot by introducing the importance of employee recognition during the new hire and orientation process. It can be as simple as a personalized welcome message from leadership or a new hire spotlight post on your company’s social media.
Celebrating employee milestones such as work anniversaries or birthdays is another great opportunity to recognize and reward your employees. Create meaningful moments for your employees during these special milestone events by offering customized rewards based on occasion, tenure, and unique interests.
📥 Project Completion
How awesome is it when you complete a massive project after months or sometimes years of hard work? Pretty darn awesome, right? Not being recognized for that major accomplishment – not so awesome. Take the time to acknowledge and celebrate significant employee contributions like project completions, product launches, and successful software integrations.
📅 Daily Praise
Employee recognition doesn’t always have to be a huge show or come with major rewards attached. Providing positive feedback or daily praise to your team members can go a long way in keeping employee morale up and team performance high.
🌟 Yearly Review Meeting
One of the most traditional times for recognizing and rewarding employees is during their annual performance reviews. These sessions are important moments to reflect and reward significant employee contributions made that year and discuss personal growth and career objectives for the year ahead.
Why should you use different types of employee recognition?
With so many awesome employee reward systems and methods in the market, why limit yourself and your employees to just one type? It’s important to use a variety of recognition and reward types to keep things exciting and impactful for your employees and to effectively build a culture of recognition in your workplace.
Using just one reward or recognition format can get quite boring and even result in employees feeling blasé about your recognition efforts rather than engaged. You also want to have the flexibility to select the best reward type suited for the moment and person you’re recognizing or rewarding. Some reward & recognition types are more fitting than others depending on those details.
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Types of employee recognition & rewards to utilize at your company
1. Spot Bonuses
As the name suggests, spot bonuses are monetary bonuses given on the spot to an employee for reaching a particular milestone, professional achievement, or project completion. This differs from year end or mid-year bonuses in that they can be given at any time of year to a particular employee in recognition of their stellar, individual performance.
Why this employee recognition type is effective: This type of recognition is effective because it is based on a specific employee’s merit and key performance indicators. Many times spot bonuses motivate employees just as much as annual bonuses because they recognize personal milestone achievements.
Learn more: How To Give A Spot Bonus
🔗 Pair with this type of employee reward: You can pair this recognition type with all sorts of awards including…
- 📝 Personal thank you messages on WorkTango
- 💳 Digital gift cards
- 🍔 Buy them lunch
Tip: Work closely with your HR team to establish some parameters on why and how spot bonuses are earned and distributed.
2. Physical Notes
Who says the art of writing letters and notes is dead? A physical note (or email if remote working) may seem like a small way to recognize your employees, but it can be truly meaningful when done right.
Rather than simply saying ‘thank you,’ explain to your employee how appreciated their effort is and the positive impact it has to the success of the overall business.
Why this employee recognition type is effective: This form of recognition is effective because it shows that leadership truly does value and appreciate the contributions of their employees, no matter how big or small.
Learn more: 10 Ways To Say Thank You To A Team
🔗 Pair with this type of employee reward: Pair your thank you note with an employee care package or custom team reward to give out at your team call.
Tip: Choose the moments worthy of physical thank you notes. You don’t want to overdo it to the point where your notes of appreciation seem insincere.
3. Verbal Praise
It’s always nice to hear when you’re doing things well, so verbal praise is a core way to show employee appreciation. This has become especially important during the rise of remote & hybrid work environments because we’re not physically together speaking multiple times a day.
Remote employees can sometimes feel like they’re shooting in the dark, so verbal praise is a great way to let them know they’re on the right track.
Why this employee recognition type is effective: Verbal praise is an effective recognition type because it encourages and rewards quality work performance.
Learn more: Employee Appreciation Words and Tips For Recognizing Colleagues
🔗 Pair with this type of employee reward: Pair verbal praise with company-wide shout-outs if your team is having an allhands meeting.
Tip: Provide nuggets of verbal praise during the onboarding and training process. Starting this type of employee recognition early establishes a positive working environment up front.
4. Employee Recognition Software
Whether you’re a smaller business or a large company, there’s employee recognition software out there that will fit your unique business needs and goals. Employee recognition software is a way of formalizing and standardizing your employee recognition and reward efforts.
These platforms typically work off a points system where reward points can be earned, sent and redeemed all in one platform.
Why this employee recognition type is effective: Employee recognition software is effective because it encourages colleagues to interact with one another and establishes a formalized way to recognize and reward your employees.
Learn more: The Best Employee Recognition Software Platforms This Year
🔗 Pair with this type of employee reward: Pair this type of reward with earning spot bonuses or encouraging peer-to-peer recognition. For a clear breakdown of what these kinds of platforms look like, explore the chart below:
Tip: Many employee recognition platforms can integrate with your existing HR and business tools, so ask about integration capabilities when shopping around.
5. Peer to Peer Recognition
Most of us are familiar with top-down recognition models in which leadership and management evaluate performance and issue recognition & rewards to their direct reports. It’s important to layer in peer-to-peer recognition as well so that you have transparency & insight into how well your employees are performing and working with one another. Employee recognition platforms typically have a peer-to-peer recognition feature built in.
If you don’t have a formal recognition platform, you can still encourage peer to peer recognition by having employees nominate star performers on their team.
Why this employee recognition type is effective: Peer to peer recognition is effective because it allows those who work with your employees most to provide praise on day-to-day contributions and identify unsung heroes on your team.
Learn more: Best Peer-to-Peer Recognition Ideas, Solutions, and Programs
🔗 Pair with this type of employee reward: Pair peer to peer recognition with verbal praise and employee recognition software.
Tip: Peer to peer recognition helps to build a culture of appreciation so be sure to make this recognition type a pillar in your employee recognition program. You can use a resource like Motivosity to run the entire program so that you can focus on encouraging peer to peer interaction at your organization.
6. Employee Milestones
Another effective type of employee recognition is celebrating important employee milestones such as onboarding, birthdays, life changes, and work anniversaries.
No matter what milestone moment your employee is experiencing, it’s important to celebrate that moment with them by recognizing and rewarding that milestone accordingly.
Why this employee recognition type is effective: This type of recognition is effective because it shows your employees that you care enough to celebrate their milestone moments with them and by doing so, create memorable moments.
Learn more: Top Ten Employee Milestones To Celebrate With Coworkers
🔗 Pair with this type of employee reward: Pair employee milestones with a form of public recognition or a non-monetary incentive such as a fun experience or outing!
Tip: Set up an employee milestone program through Caroo, where you can input all your employee birthdays and anniversaries, and ship gifts out all in one easy (and free!) to use platform.
Caroo’s all-in-one gifting platform makes it possible to manage, order, and send employee gifts with just a few clicks.
7. Public Recognition
While some shyer employees may cringe a bit on this one, public recognition is an awesome way to show employee appreciation and encourage employee recognition in the workplace.
Whether it’s a team get-together or your annual company gala, think about implementing a moment of public recognition to honor your star performers and their accomplishments.
Why this employee recognition type is effective: Public recognition is an effective type of employee recognition because it shines a spotlight on people who may be flying under the radar but are making massive contributions to company success. Don’t let these rock stars go unnoticed.
Learn more: 39 Best Employee Recognition Ideas For Work
🔗 Pair with this type of employee reward: Pair this type of employee reward with employee awards that are given in public settings or virtual company-wide town halls.
Tip: Encourage your executive leadership team to spearhead public recognition efforts. A public shout out from a company’s CEO is a major moment in any employee’s career.
8. Non-Monetary Incentives
While monetary rewards and incentives are essential for employee retention, non-monetary incentives have become just as important when it comes to recognizing & rewarding your employees. Non-monetary incentives are non-cash perks or benefits that employers provide to their employees.
These can include things like flexible working hours, extra PTO days, and experiential rewards. In a hot labor market, non-monetary incentives can be the deciding factor in employees deciding whether or not to join your company or whether or not to leave your company, so it’s important to offer enticing incentives.
Why this employee recognition type is effective: This type of recognition is effective because it bolsters employee engagement, employee retention, and helps to attract top talent in the industry.
Learn more: Non-Monetary Incentives Guaranteed to Keep Your Employees Motivated
🔗 Pair with this type of employee reward: Pair your non-monetary incentives with relevant employee milestones and tie in these incentives with your employee recognition software.
Tip: Create unique non-monetary incentives specific to your company culture such as dinner with the CMO or a paid trip to visit company headquarters.
9. Employee Awards
Employee awards, such as Employee of the Month or Top Sales Rep of the Quarter, are another prime example of employee recognition working for all kinds of teams. You can give out these awards either virtually or in-person as a way to show appreciation for outstanding performers.
Many companies present these awards at a set frequency for example monthly, quarterly or annually so that employees have multiple opportunities throughout the year to earn these various employee awards.
Why this employee recognition type is effective: Employee awards are an effective employee recognition type because they incentivize employees to reach their highest potential levels and deliver strong performance results.
Learn more: 16 Amazing Employee Award Ideas For Appreciating Your Staff
🔗 Pair with this type of employee reward: Pair employee rewards to public praise and personalized thank you messages to create a memorable and personalized moment for that employee.
Tip: Publicize the reward that accompanies these employee awards to serve as an extra motivator for your employees.
10. Company-Wide Shoutouts
A company-wide shoutout is a great recognition method to show employee appreciation at large companies and small companies alike. You can do these shout outs during company town halls, at in-person events, and virtually via company-wide emails, newsletters, or social media.
Why this employee recognition type is effective: Company-wide shoutouts are effective because they recognize the boots on the ground employees who make things happen and are vital to the bottom line. By praising employees on a company-wide level, you’re showing them just how valued and important they are to the business.
Learn more: Employee Shout Outs For Giving Thanks to Your Coworkers
🔗 Pair with this type of employee reward: Pair shoutouts with employee awards or milestone moments. For example, feature a star contributor on your company’s LinkedIn to recognize their accomplishments throughout their 10 years at the company.
Tip: Ask those who work closely with the employee you’re recognizing for a few words about how this person has positively contributed to the team. This is a great way to personalize the shout out and include colleague praise as well.
People Also Ask These Questions About The Types Of Employee Recognition
Q: What is the most effective type of employee reward?
- A: The most effective types of employee rewards are monetary and non-monetary incentives paired with moments of praise and recognition.
Q: How do I choose the best type of reward to motivate employees?
- A: To choose the best type of reward to motivate employees, you should identify rewards that align best with your unique company values and recognition goals. You can also launch an employee engagement survey to help identify the reward types that most resonate with your staff.
Q: Are there free types of employee recognition?
- A: Yes, there are free types of employee recognition such as verbal praise, company-wide shout outs, and physical notes.
Q: How do I measure the type of employee recognition chosen for my team?
- A: To measure the type of employee recognition chosen for your team, partner with an employee recognition platform provider. They can provide robust reporting on employee engagement and reward usage.
Q: What are the differences between the types of formal and informal recognition?
- A: The main difference between formal and informal recognition is that formal recognition is standardized and planned while informal recognition can be given at any time in a myriad of formats.